Internet pirates might pay only $20 compensation each to Dallas Buyers Club

The studio pursuing Australians who allegedly pirated its film Dallas Buyers Club could end up spending hundreds of thousands of dollars to recover just $20 compensation per case if it chooses to pursue individuals through the courts, a leading intellectual property lawyer says.

In a landmark Federal Court case on Tuesday against several Australian internet service providers including iiNet, Dallas Buyers Club LLC won a "preliminary discovery" case to obtain the names and physical addresses of 4637 customers it alleged had downloaded its film, for the purposes of suing them for copyright infringement.

However Shelston IP Lawyers partner Mark Vincent said unlike in the US, Australia did not have statutory damages provisions prescribing a minimum amount of monetary compensation, and an Australian court would likely only order damages for the cost of legally obtaining the film – about $20.

"The damage award is likely to be very modest," Mr Vincent said.

"It won't be a money-making scheme for the studios."

But Mr Vincent said a defendant would still face considerable court costs if they decided to fight a case and lost, as they would likely be ordered to cover the studio's legal costs.

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Australia does have provision for additional damages including aggravated damages too, he said, but these applied only to "special cases" of flagrant disregard for the law and were unlikely to apply to a single infringement.

Marque Lawyers managing partner Michael Bradley, representing Dallas Buyers Club, said the pursuit of pirates in Australia was about "seeking to send a much bigger message to consumers about the broader issue of unauthorised downloading and uploading of copyright material".

"Up until now in Australia the scale of infringement has been almost unimaginably high, with no consequence," Mr Bradley said.

The comments come as the telco industry on Wednesday finalised a proposed anti-piracy scheme that would see Australian ISPs give pirates "three strikes" before copyright owners can seek a preliminary discovery order to obtain their details and sue them.

Under the new system, copyright owners will send lists of Internet Protocol (IP) addresses that belong to alleged illicit downloaders to telcos.

This will be cross-checked against the IP addresses of all Australian internet users and warning letters will be sent out.

Consumer groups CHOICE and ACCAN warned the code would pave the way to so-called "speculative invoicing" in Australia, which had seen rights holders such as Dallas Buyers Club LLC send individuals overseas letters demanding thousands of dollars compensation to avoid going to court over copyright infringement.

But on Tuesday Justice Nye Perram ordered that any draft letters which Dallas Buyers Club LLC intended to send to alleged copyright infringers be reviewed by him first as a preventative measure against speculative invoicing.

Mr Bradley said his client had not made a decision about what steps to take following the verdict but suggested it would not engage in the practice, adding that some of the discussion around speculative invoicing had been "alarmist".

"Our client is mindful of dealing with a different jurisdiction in Australia so the approach will be different and tailored to the local environment," Mr Bradley said.

"There's no reason to draw a parallel to what happened in the US or other jurisdictions.

"You're not going to see in Australia people receiving letters saying, 'Give us money or you'll be paying a fine of $150,000' or that kind of ridiculous amount."

Speaking of the industry code more generally, Mr Vincent said CHOICE's view around speculative invoices becoming a problem was "plainly wrong" as the federal court had set a precedent with Tuesday's ruling.